Towers Watson, the worldwide professional services company, has announced that it has received two patents from the United States Patent and Trademark Office (USPTO) for its unique financial modeling technique using Replicated Stratified Sampling (RSS) in the insurance industry.
These two key patents (U.S. Patent No. 8,131,571, which was issued on March 6, 2012, and U.S. Patent No. 8,126,747, which was issued on February 28, 2012) are for the RSS smart modeling technique at Towers Watson, which is designed to make complex insurance calculation run times exceptionally faster, and to assist executives in the industry in better understanding risk.
According to a senior consultant in the Financial Services consulting group at Towers Watson, Steve Bochanski, the insurance industry as a whole has been facing significant struggles in its ability to achieve an accurate understanding of all exposures to risk in a real-time way, while being able to provide consumers with products that suit their needs.
Bochanski explained that “A lack of robust, real-time modeling tools has contributed to management’s struggle to fully understand and measure risk exposure.” He then went on to say that Towers Watson believes that their proprietary RSS modeling technique will offer financial services and insurance companies a smarter and faster approach to achieving the same goal.
This newly patented technique applies statistical sampling in order to provide an accurate measure in the risk metrics changes, while at the same time significantly minimizing the run time for this process. Sampling is nothing new for metrics in other industries, but until now the insurance sector has not been using it.
